The Basics of Direct Access Trading
Before the coming of Direct Access Trading (DAT), traders would put requests to purchase or to move stock through an agent, known as the traditional brokerage firm.
Trading Through Direct Access Brokers
Direct Access Trading (DAT) is a strategy for trading stocks, which eliminates all of the issues related with traditional brokerages. The online stock broker eliminates the trading desk or another broker from the trade execution process, by enabling the traders to interface specifically to the market by means of a PC and an internet connection. Through this direct association, the traders would be able to see inside the market.
Direct Access Trading and the Online Trading are two really different forms of trading stocks. While trading through internet has engaged the individual to take a greater role especially in their own strategies. To progress to learn more about Level II and Direct Access Trading, you should be acquainted with some of the fundamental trading terminologies:
Locked Market. As when the inside offer is equivalent to the inside ask.
Bid. Buying a price
Ask. Selling a price value
Spread. It is the contrast between inside bid and the inside offers.
Volume. It is the total number of the shares traded especially during the given period.
Bull or the Bullish. It is a bias to make higher pricing
Bear or the Bearish. It is a bias to lower pricing.
Inside Bid. It is the best current buying price
Inside Ask. It is the best current selling price
Long Position. The owner of the stock with a goal to sell in a higher price.
Short Position. A borrowed stock, being sold at the current price with the purpose of repurchasing with lower price.
Electronic Communication Network. It is an electronic order that is usually somewhere traders are able to use or facilitate.
Market Order. It is an Order to purchase or to sell at the most ideal current price with a predetermined number of the shares.
Limit Order. It is an order to purchase or to sell at a predefined price and share size.
Pending Order. It is an undelivered order that is usually great until being cancelled
Tickets. Every ticket brings about a fitting commission charge dependent on every day ticket volume and sort of execution.
Filled. It is a finished pending request.
Partial Fill. It is a request filled at not exactly the measure of shares determined.
Direct Access Broker. It is a particular business that centres around the speed and execution, permitting the users to course requests to an electronic communication network, trades and market makers.
Crossed Market. As when the inside offer is much greater than the inside ask.